Cash Constraints and Business Start-Ups: Deutschmarks Versus Dollars
Syracuse University Center for Policy Research Working Paper No. 11
34 Pages Posted: 13 Apr 2011
Date Written: June 1, 1999
Abstract
In this paper we analyze microdata to explore differences in the rates at which American and German workers leave their salaried jobs to become self-employed. We document that the rate of self-employment is lower in Germany than in the U.S., and the rate of transition from wage-earning to self-employment is lower as well. We find evidence that German workers face liquidity constraints that are more severe than those of their American counterparts. Further, the difference in transition rates cannot be attributed to observable differences between German and American workers.
JEL Classification: G24, J23, M13, O57
Suggested Citation: Suggested Citation
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